Jerome Powell (L), chair of the U.S. Federal Reserve, with Janet Yellen, now Treasury secretary.
Elijah Nouvelage/BloombergU.S. stocks were mixed on Thursday, after the Federal Reserve indicated it was in no hurry to remove stimulus as the Biden administration eased its stance on corporate tax hikes.
Shortly after the open, the Dow Jones Industrial Average slipped 35 points, or 0.1%, while the S&P 500 rose 0.3%. The Nasdaq Composite opened up 0.9%.
The Fed didn’t alter its policy, but minutes from its latest meeting out Wednesday afternoon confirmed the central bank isn’t close to making changes that would lift interest rates. The 10-year Treasury yield slipped to 1.65% on Thursday morning. Lower bond yields make stocks more attractive.
Initial jobless claims for the week also came in worse than expected, at 744,000, higher than the estimated 694,000.
The Nikkei 225 ended 0.1% lower in Tokyo, but only 2% below its 52-week high reached in February. Other Asian indexes, including the Hang Seng in Hong Kong and the S&P/ASX 100 in Sydney, advanced.
The Stoxx Europe 600 rose 0.4%, and was on track to set a record high.
It was the first opportunity for traders in Europe and Asia to react to the minutes of the last Federal Reserve interest-rate meeting, which showed the central bank would continue its current pace of bond purchases.
“This is in line with what we’ve been expecting and adds more credence to our view that the Fed is unlikely to start policy normalization any time soon. After all, in the minutes it was also revealed that a number of participants highlighted the importance to clearly communicate their assessment of progress towards their goals well in advance of the time when it would warrant a policy change,” said Charalambos Pissouros, senior market analyst at JFD Group.
Fed Chair Jerome Powell is due to speak on Thursday at an International Monetary Fund event.
Meanwhile, the political debate around the Biden administration infrastructure spending proposal continues, with Commerce Secretary Gina Raimondo saying there was room to compromise on the proposed increase in corporate taxes to 28% from 21%.
Of stocks in the spotlight, discount giant Costco Wholesale reported a same-store sales rise of 16% for March.
Anglo American rose 3% in London, after saying it is planning to spin off its thermal coal business, as environmentally-sensitive investors increasingly pressure companies to divest from coal activities.
CommScope (ticker: COMM) shares rose 5.2% after the company said it will spin off its home networks business.
Textron (TXT) shares rose 2.1% after Goldman Sachs upgraded the stock to Buy from Neutral.
U.S. Bancorp (USB) shares slipped 0.7% after JPMorgan upgraded the stock to Overweight from Neutral.
TPI Composites (TPIC) rose 3.2% after Stifel initiated coverage with a buy rating.
CarGurus (CARG) shares are up 4% after Raymond James upgraded the stock to Outperform from Market Perform.
Write to editors@barrons.com
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Asian and European Stocks Climb as Fed Confirms Easy Policy Stance - Barron's
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